This content is not available in your region

Saudi Arabia's oil price target revealed

Access to the comments Comments
By Euronews
Saudi Arabia's oil price target revealed

Saudi Arabia wants crude oil prices to rise to around $60 a barrel this year.

That is according to a report by the Reuters news agency quoting sources from OPEC countries and the oil industry.

Around $60 is the level the Saudis and their Gulf allies – the United Arab Emirates, Kuwait and Qatar – believe would encourage investment in new fields but not lead to a jump in output by US shale oil producers.

An agreement last November by OPEC and other major producers to pump less pushed up prices by $10 a barrel and appears to be holding, but analysts expect benchmark Brent crude to be short of $60 this year, averaging $57.50 dollars a barrel.

In recent weeks it has been trading around $56 a barrel.

The problem for the traditional producers like Saudi Arabia is that the break-even price for US shale oil producers fell last year to an average of $35 per barrel, according to a report from consultancy Rystad Energy issued earlier this month.

US shale producers started to step up production again when crude prices first topped $50 a barrel in May 2016. Advances in technology have made it easier for them to adapt quickly to oil price fluctuations.